The Bear’s Lair: McKinley 2024!

In 2016, this column recommended that Americans choose Robert Banks Jenkinson, 2nd Earl of Liverpool as their President (having been born in 1770, before U.S. independence, he was clearly eligible). Alas, the American people made the mistake of ignoring this recommendation, both in that year and in 2020. This time around, this column has an alternative recommendation: that Americans should choose that quintessential Republican, William McKinley, whose economic and foreign policies would be an enormous improvement on anything we have seen in recent years.

It was a cliché of the Romney-era Republicans that free trade was a distinctive Republican virtue and that protectionists were Democrats. This was the reverse of the truth. Before the Civil War the Democrats, a majority of whom represented Southern states, were strongly anti-protectionist because the South correctly believed that protectionism was solely in the interest of the manufacturing North, harming the Southern economy by restricting its access to European manufactured goods. Thus the protectionist 1828 tariff was known in the South as the Tariff of Abominations.

The last pre-war Tariff, passed by a Democrat-led Congress under President James Buchanan in 1857, was a compromise of moderate protectionism, with the protectionist element inserted because Buchanan came from manufacturing Pennsylvania. As such it was a well-balanced piece of legislation that deserved to remain in force far longer than it did.

Once the Republicans had full control of the 36th Congress after the Southern walk-out, it was a different story. The first Morrill Tariff, raising rates sharply, was passed by that Congress on March 3, 1861, even before President Lincoln was inaugurated. The second Morrill Tariff, passed by the 37th Congress the following year, raised rates much further, with the excuse of needing to fund war costs. It thus ended the era of global free trade that Britain had initiated with the Cobden-Chevalier Anglo-French Treaty only two years before. Thereafter Republican Congresses raised tariffs continually, the only difficulty after the Civil War ended being finding anything on which to spend the resulting tsunamis of revenue. The 51st Congress under Benjamin Harrison’s presidency, which passed the McKinley Tariff of 1890, was termed the Billion Dollar Congress because of its profligacy, to which its Speaker Thomas B. “Czar” Reed responded: “This is a Billion Dollar Country.”

McKinley’s first action as President, in a country just beginning to emerge from a major depression, was to call the 55th Congress into session to pass the 1897 Dingley Tariff, raising tariff rates even higher to an average of 48% from his own tariff of seven years previously. He was able to do this because the United States’ largest trading partner, Britain (and its colonies and dependencies) was pursuing a unilateral free trade policy that was by then economically sheer suicide. If the sucker hands you money on a plate, you take it!

The result was a gigantic U.S. boom, with the 1898-1902 period seeing the formation of huge corporate trusts, sheltered as they were behind an impenetrable tariff wall – the economic benefits of monopolization, in a market from which foreign competition had been removed, were simply too great to miss out on. More importantly for the electorate, however, the result was also a massive surge in real wages and prosperity in general, as well as tax revenues that made it child’s play for McKinley to finance the successful Spanish-American War.

If McKinley were the Republican Presidential candidate in 2024 he would have the same task as he did in 1896 – reassuring an electorate battered by a poor economy that adherence to sound money and tariffs would make their situation better. In this respect, he would have an easier time than any of the other potential Republican candidates of 2024; his policies, of a Gold Standard and a protective tariff would represent a sharp break with the major mistakes of recent decades. As they did after 1896, those policies would have every chance of restoring productivity growth to its vigorous historical level, thereby restoring growth in living standards. McKinley’s slogan of the “full dinner pail” might need some updating in the context of 2024, but spin doctors could easily do that, while maintaining the essential soundness of McKinley’s economic position.

In addition McKinley’s 1896 battle against “Bryanism” was the first volley against the regulatory state, which Bryan saw as enabling him to reorder the U.S. economy in favor of those who had lost out under free market capitalism. Bryan’s “free coinage of silver” was essentially the same ‘solution’ to U.S. economic problems as Ben Bernanke’s mass printing of money under “quantitative easing;” it would similarly have distorted the free market’s price signals and weakened economic performance, however much it benefited its politically favored beneficiaries. In a 2024 context, McKinley would rightly see that regulation had become an unaccountable monster, by which the Federal bureaucracy leached value from the private sector. Like President Trump, he would deregulate vigorously, but unlike Trump, as a figure of rocklike integrity and intelligence he would be far less vulnerable to “woke” destabilizing attacks from the left.

On fiscal policy, McKinley would be committed to sound money and the restrained fiscal policy of his own time and would be horrified by the persistent trillion-dollar deficits of our day (even though he would recognize that, in era without a Gold Standard, a trillion dollars is not what it was). He would accordingly scale back spending sharply, shutting down the various gross corruptions in the U.S. fiscal system. He would also close the most egregious loopholes in the U.S. tax code, notably the tax-deductibility of charitable donations, which he would rightly regard as an egregious handout to the ultra-rich and the far left. Further than that he would not need to go; his tariff would bring in sharply increased customs revenues, helping to close the largely theoretical deficits in the Social Security and Medicare systems.

In foreign policy, McKinley was opposed to aggression until forced into war with Spain by an unaccountable media and a segment of his own administration including the hyper-aggressive Theodore Roosevelt. In today’s world, he would be very well aware of the media’s tendency to
ally with the bureaucracy to produce a belligerent apparent consensus on foreign policy that was opposed to the interests of the American people and global tranquility. He would see through Volodymyr Zelenskyy and having more than a century of separation from past policy errors, would see the damage than an over-expansionist NATO had caused. Accordingly, his naturally pacific approach and diplomatic skills would be devoted to ending the Ukraine war on the basis of a compromise peace. While not an “isolationist” in the 1930s sense, McKinley was keenly aware of the costs and dangers of over-extension of U.S. forces and would today scale back U.S. commitments accordingly.

It may be argued that a President with such rigorous and fiscally austere policies could never get elected in today’s political market. I would argue the opposite: that if McKinley presented himself to the voters as the Republican candidate, the Trump supporters would turn out in record numbers, recognizing that he represented the best chance of all to “Make America Great Again” as it had been in his time. Conversely, the dozy suburban housewives, so prone to turning away from good policies by “woke” follies and imagined faults in Republican candidates, would recognize McKinley’s integrity and character, as well as his superb war record, and would therefore stray less than normal from the Republican cause. Moreover, his fine Civil War record and complete freedom from racism would endear him to African-Americans. With that combination, he would sweep to electoral victory.

William McKinley, one of America’s greatest Presidents! Where is he, now that we need him?


(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)